Meet Anita, 34 and Geeta, 35.
They were both lucky to get their dream jobs. Anita works for an advertising agency and Geeta just got promoted to manager-level at a multinational company (MNC).
Mornings for both are different. Anita gets up smiling and Geeta wakes up whining. Anita looks forward to reaching office and face the day. Geeta is looking for some reason to skip work.
Evenings, too, are different for both. Anita generally works late evenings due to deadlines. Geeta packs her bag to leave at 6.00 pm.
Why is Geeta not committed to her dream job like Anita? The difference lies in the employee engagement policy of both the companies.
Decoding employee engagement
Engagement goes through same steps for a couple or an employee and company. One of them approaches the other. They get to know each other better. They think they are made for each other. Even after the couple ties the knot, and an employee gets on board, the process does not end. Both the parties have to strive hard to continuously make the other happy. They continue to woo each other. They try to stay committed to each other.
Engagement is not a one-time thing. It is a continuous process.
Employee engagement is the process of creating an optimal working environment for the employees so that they perform well and stay committed to the organisation. It is an approach to creating happy and satisfied employees, who are a valuable resource for organisational success. Employee engagement involves putting an organisational culture into practice wholeheartedly every single day.
Why employee engagement?
An effective employee engagement policy creates employees like Anita. They are keen to reach office and contribute to team performance and achieve targets efficiently. Engaged employees are seamlessly aligned with a company’s mission and willing to go the extra mile to achieve the vision.
Engaged employees means happy employees, leading to better performance, with a competitive edge and ensuring higher profits.
This is the ultimate motive of employee engagement. Happy employees create a happy workplace. And who wouldn’t want to work at a place where their opinion is valued and their interests are taken care of?
ROI on engagement
One fact of employee engagement is – cost! Employee engagement is not a one-time cost. It has to be endured regularly and frequently for best results. The return on investment in machinery can be quantified. It would make it easy to calculate the ROI on employee engagement if you treat employees as your valuable resources. Spending on human resources is also evaluated based on the returns on the investment. Many companies put this at the bottom of the priority list as they believe that the cost is not worth it. But is it really?
More engagement means more returns?
Sure, employee engagement makes employees happy. Some may even perform better. But do companies with high engagement perform better than the ones with lower engagement? Is the positive effect of employee engagement evident in the financial and operational figures of the company? This is what will determine its effectiveness. A rise in numbers and operational efficiency can encourage leaders to allocate more funds to employee engagement in the future.
Factors that determine ROI
The organisations that are inclined towards employee engagement reap its benefits in various forms. Employees are self-motivated, perform tasks better, and are vocal about their opinions. The returns on the money invested for employee engagement can be calculated based on three important factors. A sum of the money earned and saved on these can be considered as the ROI.
The difference in productivity before and after undertaking employee engagement activity can be a determining factor. Happier employees are loyal to the organisation and tend to perform better. Businesses with more engaged employees have 51 percent higher productivity. Engaged employees outperform disengaged employees by 20-28 percent. The profits of engaged companies grow three times faster than the competition.
Disengaged employees find reasons to not come to work. Apart from stress-related issues, lack of motivation is also the reason for absenteeism. This can be a costly affair calculated by no contribution from the absent employee on a given day and salary paid for that day. Engagement has had a direct impact on absenteeism. When teams are engaged in work, businesses saw a 41 percent drop in absenteeism. Highly engaged employees have lesser absence days – in average three to five days – compared to non-engaged employees.
3. Employee turnover
Employee engagement is inversely proportional to employee turnover. This holds true because when an employee is satisfied with the job and committed to the company, he/she is less likely to quit. In such cases, sometimes even compensation takes a backseat. Low engagement can result in high turnover. Highly engaged employees are 87% less likely to quit an organisation.
To engage or not to engage
Spending on employee engagement wisely can prove fruitful. Yet, there aren't too many organisations that have embraced it completely. The consequences of having unengaged employees can also prove costly for an organisation in terms of unproductive time. Engagement is like a Red Bull (beverage) for employees. It gives them wings. Disengaged employees do not use their time efficiently. These employees spend their time in office sleeping or playing games. You can always find them on social media or in the canteen.
At the end of the day, the success of a business boils down to cost. Not all businesses may be able to spend substantially on engaging their employees. These businesses can go to the basics and engage their employees in cost-effective ways. Here are some:
> Employees don’t quit their job, they quit bosses. Senior management and leaders should be compassionate and empathetic towards their staff.
> Keep in touch with the employees. Give and take feedback regularly. Ensure two-way communication.
> Instill work-life balance at your workplace. Do not encourage overtime work.
> Today’s work dynamics do not demand nine to five working hours. Try flexible timings as per employees’ job roles.
> Create an environment and culture of growth for all.
> Recognise and acknowledge their efforts. A pat on the back can go a long way.
Employee engagement, if executed properly can give direct and indirect returns to an organisation. However, the engagement activities need to be customised for each company depending upon its size, culture, and values. Be smart. Spend on engagement wisely to get maximum returns.